Matador Resources (MTDR) investors are expected to focus on the oil and natural gas company's appetite for mergers and acquisitions after a recent asset sale, RBC Capital Markets said Thursday in a report.

Matador "remains vigilant in its M&A strategy as it continues to evaluate ground game and bolt-on acquisitions," RBC said. Proceeds of as much as $160 million from the sale of a stake in Pinon Midstream are expected in Q4.

RBC cuts its Q3 estimate for earnings per share by Matador to $1.75 from $1.84 on lower gas prices and higher lease operating expenses. Production may be toward the high end of proforma guidance, RBC said.

RBC reduced its price target on Matador to $70 from $75 and maintained the outperform rating. Company results from Q3 are expected Oct. 22.

"Shares will outperform peers over the next 12 months" on the back of a large presence in the Permian Basis, RBC said.

Matador shares were little changed in after-hours trading after gaining 1% in the regular session.

Price: 54.75, Change: +0.02, Percent Change: +0.04